What Does it Mean When Someone Says a Stock Went Up X Points?

For stocks, one point equals one dollar. So when you hear that a stock has lost or gained X number of points, this is the same as saying the stock has lost or gained X number of dollars.

17.68

The number of points, or dollars, gained by the S&P 500 index's biggest 2018 gainer, Advanced Micro Devices; $17.68 is equivalent to 79.6%.

Although one point always equals one dollar, the percentage value of one point movement can be different for two companies.

Let's consider a simple example: If the fictional company TSJ Sports Conglomerate loses four points, dropping from $12 to $8, it would have experienced a 33% drop in the share price. This is dramatically different from a four-point drop experienced by a company like Cory's Tequila Co., which is trading at $104. If its stock drops $4.00 to $100, this only represents a 3.8% decline.

Points refer only to the dollar amount that has changed, not the percentage; as a result, the significance of a point change is magnified when dealing with stocks that trade at lower levels. Two stocks can lose the same number of points but very different percentages.

Points Are Not Percentages

Do not confuse points with percentages. When you hear someone say the stock dropped ten points, the significance of that drop depends on how high the share price is.

It is important to note that this refers strictly to stocks, nothing else. People often talk about indexes, bond prices or currencies being up or down X number of basis points, which are different. One basis point is equal to 1/100th of a percent, so if someone says the dollar is up 50 basis points, that means it is up 0.5%.

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